Competitive Bidding Strategies in Construction Projects
Summary
Competitive bidding remains the primary mechanism for awarding construction contracts worldwide, encompassing sealed bids, reverse auctions and multi-attribute tendering. Contractors must first undertake a bid/no-bid analysis that balances potential profitability, organisational capacity and prevailing market conditions. Those electing to bid then determine an optimal pricing strategy, often blending cost-plus and market-oriented mark-ups while accounting for risk allocation, cash-flow requirements and the likelihood of winning. Recent advances have introduced data-driven decision tools, enabling firms to benchmark competitor behaviour, anticipate tender requirements and adjust bid shading accordingly. In parallel, procurement authorities increasingly employ multi-attribute criteria—such as technical capability, sustainability credentials and schedule reliability—alongside price, compelling bidders to adopt integrated strategies that optimise both commercial and qualitative performance. The adoption of electronic platforms and real-time auctions has further intensified competition, heightening the importance of timely market intelligence. Collectively, these developments underscore the global significance of robust bidding frameworks that foster transparency, mitigate unbalanced or abnormally low offers, and promote sustainable outcomes for both clients and contractors.
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Competitive Bidding Strategies in Construction Projects publication trend
The graph below shows the total number of articles in competitive bidding strategies in construction projects across all publications each year (not limited to Nature Index journals).
Technical terms
Reverse auction: A procurement model in which suppliers submit descending price bids in real time, with the lowest offer typically prevailing.
Bid/no-bid decision: A structured assessment by contractors to determine whether participating in a tender is strategically and financially justified.
Multicriteria decision making (MCDM): An analytical framework that evaluates competing options against multiple weighted factors, such as cost, quality and risk.
References
- Online reverse auctions research in marketing versus SCM: A review and future directions. Industrial Marketing Management (2023).
- Modeling bidding competitiveness and position performance in multi-attribute construction auctions. Operations Research Perspectives (2015).
- A support vector machine method for bid/no bid decision making. Journal of Civil Engineering and Management (2017).
- Estimating future bidding performance of competitor bidders in capped tenders. Journal of Civil Engineering and Management (2014).
- Multi-criteria decision making for identification of unbalanced bidding. Journal of Civil Engineering and Management (2019).
- Quick Abnormal-Bid-Detection Method for Construction Contract Auctions. Journal of Construction Engineering and Management (2015).
- Factors Affecting Contractors’ Bidding Decisions for Construction Projects in Saudi Arabia. Buildings (2019).
- Will Bid/No-Bid Decision Factors for Construction Projects Be Different in Economic Downturns? A Chinese Study. Applied Sciences (2020).
- Analysis of Construction Auctions Data in Slovak Public Procurement. Advances in Civil Engineering (2018).
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